Jon Cunliffe: Financial stability post Brexit - risks from global debt

Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at the conference on "Financial Stability Post Brexit", organized by CFO Agenda, London, 7 May 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me in January to speak today at your conference on "Financial Stability Post Brexit".

I suspect that when this subject was chosen and the invitation sent, it was assumed that Brexit itself would have happened by the time of the conference. As it is, not only has Brexit not occurred, but the path to it and its eventual outcome are perhaps less clear now than a few months ago.

So it is perhaps worth spending a little time today on the financial stability risks that might arise from Brexit. I will then go on to examine the financial stability risk environment more generally.

Before going further, a health warning is necessary. It cannot be repeated too often that the Bank's approach to its financial stability objective is, in one key respect, very different to its approach to its monetary stability objective. For the latter, the Monetary Policy Committee makes the best forecast we can of the path of the economy and the path of inflation - the central case. We set out clearly and graphically the risks around those forecast, but it is the central case - what we think most likely to happen - that informs our policy decisions.